Why GameStop Stock Cratered 15% at the Open Today

Shares of video game retailer GameStop (NYSE: GME) dropped as much as 15% in early trading on Sept. 10. There's no question about what moved the stock: The company reported earnings after the close on Wednesday and the story wasn't a pleasing one.

During the second quarter GameStop reported a top-line sales decline of nearly 27% compared to the same quarter of 2019. There were a number of reasons given for the drop, including the impact of COVID-19-related store closures. However, also noted was a 10% reduction in the company's store base as a part of its "de-densification" strategy and the fact that current game consoles are near the end of their lifespans. Gamers tend to hold off on purchases when new consoles are soon to be released. And yet, despite these headwinds, GameStop still managed to beat Wall Street's top-line expectations.

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Source Fool.com